Loudeye Announces Second Quarter 2004 Results Company Announces
Increased Revenues in the Second Quarter and Provides Guidance for
the Second Half of 2004 SEATTLE, Aug. 5 /PRNewswire-FirstCall/ --
Loudeye Corp. (NASDAQ:LOUD), the worldwide leader in
business-to-business digital media solutions, today announced
financial results for the quarter ended June 30, 2004. Second
Quarter 2004 Financial Highlights -- Revenues. Revenues increased
to $3.1 million in the current quarter, compared with revenues of
$2.0 million in the first quarter of 2004 and $2.9 million in the
prior year quarter. Deferred revenues at quarter end totaled $2.7
million, an increase of more than $1.9 million, or 244% from March
31, 2004. -- Gross Profit. Gross profit as a percentage of revenues
was 42% in the current quarter, an improvement from 28% in the
first quarter of 2004 and comparable to 42% in the prior year
quarter. -- Net Loss. For the quarter, GAAP net loss was $2.8
million or $0.04 per share compared to a net loss of $2.8 million
or $0.04 per share in the first quarter of 2004 and $2.1 million or
$0.04 per share in the prior year quarter. -- Pro Forma Net Loss.
Pro forma net loss for the quarter totaled $2.1 million or $0.03
per share compared to a pro forma net loss of $2.3 million or $0.04
per share in the first quarter of 2004 and $1.1 million or $0.02
per share in the prior year quarter. -- Cash and Investments. Cash,
short-term investments and restricted investments were $32.5
million as of June 30, 2004. Pro forma net loss excludes charges
related to the amortization of intangible and other assets,
depreciation expense, charges relating to stock-based compensation,
loss on the sale of media restoration assets, net interest income
and special charges. A reconciliation of Loudeye's GAAP financial
results with its pro forma financial results is set forth below
after the accompanying condensed consolidated statements of
operations. These results are preliminary and may be subject to
change based upon the completion of the Company's review of the
final accounting for its acquisition of On Demand Distribution
("OD2") and filing of the Company's Form 10-Q. Recent Operating
Highlights -- Acquiring OD2, the leading European provider of
business-to-business digital music services. The acquisition added
over 35 customers for the company's white label digital music store
service, a Pan European portfolio of music licenses and catalog and
expanded operations to support customers in 12 European countries.
-- Launching seven new digital music store customers throughout
Europe and Australia, including NineMSN, Packard Bell, Ilse Media,
GWR, Tonlist, Eircom and Oxfam. Expanding its European digital
music store deployments with MSN and Coca-Cola. -- Adding sixteen
new customers for P2P content protection, including contracts with
major content owners across the music, film/video, game and
software industries. The addition of new customers, as well as the
expansion of current contracts, demonstrates the growing importance
and urgency in deploying anti-piracy strategies among content
owners. "We delivered increased revenue growth in the second
quarter, driven by organic growth in our core businesses and
contribution from our new anti-piracy business, which is growing
soundly. In addition, we completed an important strategic
acquisition at the end of the quarter that expands our digital
distribution business, our customer base and our rights portfolio,
significantly increasing our addressable market. This acquisition
globalizes Loudeye services and positions us uniquely to attract
new customers with global brands and greater reach," said Jeff
Cavins, Loudeye's president and chief executive officer.
Forward-Looking Financial Guidance While future results are subject
to fluctuation, Loudeye anticipates that revenues for the quarter
ending September 30, 2004 will be approximately $5.5 million to
$6.0 million, an increase of approximately 75% to 90% versus the
second quarter of 2004 and approximately double the revenues of the
prior year period. Including the expected losses from the OD2
acquisition during the third quarter, and excluding integration
related costs, the Company expects a pro forma net loss of between
$3.3 million and $3.7 million, or approximately $0.04 per share.
For the fourth quarter of 2004, the Company expects revenues to
range between approximately $7.3 million and $8.0 million, an
increase of approximately 150% to 175% versus the prior year
period. Based on increased revenues, progress in the integration of
OD2, and strict management of expenses, the Company expects pro
forma net losses to decrease in the fourth quarter and range
between approximately $2.0 million and $2.5 million. For the full
year 2004, the Company expects revenues to range between $17.9
million and $19.1 million, which represents an increase of between
50% and 60% from 2003 levels. Pro forma net losses for the full
year are expected to range between $9.6 million and $10.5 million,
or $0.13 to $0.14 per share. The Company also forecasts continued
revenue growth in the first half of 2005 and expects to achieve pro
forma net profit by the middle of 2005. "We expect aggressive
top-line growth in the second half of 2004. We intend to focus on
operational execution to maximize our financial performance in each
of our service lines and geographic markets," said Larry Madden,
Loudeye's chief financial officer. "We remain highly focused on
achieving profitability and believe we can achieve our worldwide
growth plans without sacrificing progress toward that important
financial goal. With over $32 million of cash resources on our
balance sheet, Loudeye remains well positioned to execute on our
global operating plan. We intend to leverage this financial
strength to continue to invest in new business development efforts
that will help drive organic growth, as well as pursue strategic
opportunities that can leverage our world-class infrastructure."
Forward-looking financial guidance statements are based upon
current expectations as of the date of this release and are based
upon limited available information which is dynamic and subject to
risk and uncertainty. Results may be materially affected by many
factors including those described in the Forward-Looking Statements
section below. Second Quarter 2004 Webcast Information Loudeye
management will conduct an audio webcast to discuss these financial
results. The public is invited to listen in on this webcast.
Management will discuss financial and operating results in the
quarter and end the call with a question and answer session.
Management will also provide a slide presentation to accompany its
statements, available in conjunction with the audio webcast.
Information regarding the second quarter 2004 results' webcast and
slide presentation is as follows: Date: Thursday, August 5, 2004
Time: 5:00 p.m. EDT / 2:00 p.m. PDT Audio Webcast: 5:00 p.m. EDT /
2:00 p.m. PDT; live and archived; Webcast from
http://www.loudeye.com/common/aboutus/investorrelations/earningscalls.asp
Slide Presentation: Participants accessing the audio webcast will
be able to view an accompanying management slide presentation
synchronized with the audio webcast. About Loudeye Corp. Loudeye is
the worldwide leader in business-to-business digital media
solutions and the outsourcing provider of choice for companies
looking to maximize the return on their digital media investment.
Loudeye combines innovative products and services with the world's
largest music archive and the industry's leading digital media
infrastructure enabling partners to rapidly and cost effectively
launch complete, customized digital media stores and services. For
more information, visit http://www.loudeye.com/. Forward-Looking
Statements This press release contains forward-looking information
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including Forward-Looking
Financial Guidance, statements about growth, ability to attract and
win new customers, and increased focus on operations and other
factors. Our forward-looking statements are based on currently
available information, which management has assessed, but which is
subject to rapid change due to risks and uncertainties that affect
our business, including limited visibility of future demand for our
products and services; end-consumer demand for digital music sold
from the services of our customers; current uncertainties in our
marketplace which may affect expected demand, customer selection
criteria and sales cycles; variability in the amount and timing of
expenses and cash usage; negative macroeconomic conditions or world
events; foreign exchange risk; difficulties encountered in the
integration of acquisitions into Loudeye's operations or the
failure to achieve the synergies expected from that integration;
changes in capital requirements as a result of acquisitions;
increased competition; adverse developments in any material
customer or copyright holder relationships; ability to acquire and
maintain copyright licensing agreements; uncertainty involving
intellectual property rights involved with the reproduction and
online distribution of digital media; the loss of service of our
hosting infrastructure, including the failure of third party
service providers; our ability to retain key personnel; and other
factors beyond our control. Our forward-looking statements should
be considered in the context of these and other risk factors
disclosed from time to time in the company's filings with the
Securities and Exchange Commission, including our annual report on
Form 10-K and quarterly filings on Form 10-Q (available through
EDGAR at http://www.sec.gov/). We assume no obligation to update
our forward-looking statements. Use of Non-GAAP Financial
Information The press release and webcast contain financial metrics
that are not based on accounting principals generally accepted in
the United States ("GAAP"). To supplement our consolidated
financial statements presented on a GAAP basis, we have included
non-GAAP "pro forma" measures of operating results which excludes
certain costs and expenses. The pro-forma net loss and pro forma
net loss per share presented in the press release and webcast
exclude charges for amortization of intangible and other assets,
depreciation expenses, charges related to stock-based compensation,
loss on the sale of media restoration assets, net interest income
and special charges. Included in the press release is a
reconciliation of the non-GAAP financial measures to our GAAP
financial results. As described further below, we believe the pro
forma presentation enhances an overall understanding of our
financial performance, and is used by management for that purpose.
Although management believes the above non-GAAP financial measures
enhance investors' understanding of our business and performance,
these non-GAAP financial measures are inherently limited in that
they exclude a variety of charges and credits that are required to
be included in a GAAP presentation, and do not therefore present
the full measure of our recorded costs against our revenues.
Management compensates for these limitations in non-GAAP results by
also evaluating the company's performance based on traditional GAAP
financial measures. Accordingly, investors should consider these
pro forma results together with GAAP results, rather than as an
alternative to GAAP basis financial measures. Additional details
regarding these items are included in the Company's Form 8-K
furnished to the SEC concurrently with this press release. LOUDEYE
CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data) Three Months Ended Six Months
Ended June 30, June 30, 2004 2003 2004 2003 REVENUES $3,131 $2,903
$5,122 $6,213 COST OF REVENUES Other cost of revenues 1,800 1,678
3,207 4,219 Non-cash stock-based compensation 19 4 38 7 Total cost
of revenues 1,819 1,682 3,245 4,226 Gross profit 1,312 1,221 1,877
1,987 Gross profit percent 42% 42% 37% 32% OPERATING EXPENSES
Research and development 753 392 1,343 969 Sales and marketing 836
835 1,471 2,381 General and administrative 2,232 1,740 4,192 4,492
Amortization of intangibles and other assets 126 260 266 786
Stock-based compensation 43 191 165 231 Gain on sale of property
& equipment -- (96) -- (96) Special charges -- -- (50) 8,437
Total operating expenses 3,990 3,322 7,387 17,200 OPERATING LOSS
(2,678) (2,101) (5,510) (15,213) LOSS ON SALE OF MEDIA RESTORATION
ASSETS (160) -- (160) -- OTHER INCOME, net 48 39 59 93 Net loss
$(2,790) $(2,062) $(5,611) $(15,120) Basic and diluted net loss per
share $(0.04) $(0.04) $(0.08) $(0.33) Weighted average shares -
basic and diluted 70,882 45,931 67,105 46,215 NON-GAAP PRO FORMA
INFORMATION: Net loss $(2,790) $(2,062) $(5,611) $(15,120)
Adjustments to reconcile GAAP net loss to pro forma net loss:
Amortization of intangibles and other assets 126 260 266 786
Depreciation 431 525 773 813 Stock-based compensation 62 195 203
238 Loss on sale of media restoration assets 160 -- 160 -- Interest
income, net (48) (53) (56) (90) Special charges -- -- (50) 8,437
Pro forma net loss $(2,059) $(1,135) $(4,315) $(4,936) Basic and
diluted pro forma net loss per share $(0.03) $(0.02) $(0.06)
$(0.11) Weighted average shares - basic and diluted 70,882 45,931
67,105 46,215 LOUDEYE CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands) June 30, December 31, 2004 2003 ASSETS
Current assets: Cash and short-term investments $32,143 $21,940
Accounts receivable, net 4,659 1,781 Prepaid expenses and other
current assets 1,118 345 Assets held for sale -- 363 Total current
assets 37,920 24,429 Restricted investments 316 316 Property and
equipment, net 3,903 1,123 Goodwill and intangible assets, net
48,688 86 Assets held for sale -- 730 Other assets, net 250 360
Total assets $91,077 $27,044 LIABILITIES Current liabilities:
Accounts payable $4,610 $1,229 Line of credit -- 1,285 Accrued
compensation and benefits 437 378 Other accrued expenses 4,547
1,155 Accrued special charges 521 1,670 Accrued acquisition
consideration 15,827 -- Deferred revenue 1,983 485 Current portion
of long-term debt and capital leases 1,281 1,348 Common stock
payable related to acquisition 2,596 -- Liabilities related to
assets held for sale -- 98 Total current liabilities 31,802 7,648
Deferred revenue 757 228 Accrued acquisition consideration, net of
current portion 4,519 -- Long-term debt and capital leases, net of
current portion 1,540 2,135 Total liabilities 38,618 10,011
STOCKHOLDERS' EQUITY 52,459 17,033 Total liabilities and
stockholders' equity $91,077 $27,044 DATASOURCE: Loudeye Corp.
CONTACT: media, Karen Demarco of mPRm Public Relations,
+1-323-933-3399, or , for Loudeye Corp.; or investors, Mike
Dougherty of Loudeye Corp., +1-206-832-4000, or Web site:
http://www.loudeye.com/
Copyright
Loudeye (NASDAQ:LOUD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Loudeye (NASDAQ:LOUD)
Historical Stock Chart
From Sep 2023 to Sep 2024